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News About Tech, Money and InnovationSun, 02 Aug 2015 23:11:56 +0000en-UShourly1http://wordpress.org/?v=4.2.3Copyright 2015, VentureBeatA Microsoft-Salesforce tie-up might be all about the growing purse of the CMOhttp://venturebeat.com/2015/05/07/a-microsoft-salesforce-tie-up-might-be-all-about-the-growing-purse-of-the-cmo/
http://venturebeat.com/2015/05/07/a-microsoft-salesforce-tie-up-might-be-all-about-the-growing-purse-of-the-cmo/#commentsFri, 08 May 2015 00:30:22 +0000http://venturebeat.com/?p=1719893ANALYSIS: The likely suitors have narrowed down to Microsoft as the company with enough bucks, and the most to gain, from buying Salesforce.
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ANALYSIS:

Persistent rumors of an acquisition have been floating around Salesforce for weeks now.

The market has twice halted trading of Salesforce’s stock in the last two weeks — once on April 29 and again on Tuesday. This was necessary because the price spiked up dangerously fast on news that the cloud company was hearing buyout offers.

News reports didn’t name a suitor, but the likely suspects soon narrowed down to Microsoft. It’s one company with the bucks to buy Salesforce (for cash, if it wanted to), and it has the most to gain from doing so.

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A Microsoft deal makes sense on a number of strategic, financial, and cultural levels.

CRM is just the start

A good place to start in the discussion is with customer relationship management (CRM) software — though this doesn’t mean it’s the key driver of a potential deal.

CRM is Salesforce’s heritage (so much so that its stock ticker is CRM), and it’s still bringing in a large chunk of its revenue by selling cloud-based solution to large enterprises. Microsoft also sells such a platform, and it dominates the field of companies that sell CRM to small and medium-sized business.

“I would not be surprised to see Satya [Nadella, Microsoft CEO] make a bold move like this to remake Microsoft,” Sugar CRM CEO Larry Augustin tells VentureBeat. “Salesforce sells a suite of cloud applications to large enterprise; that’s almost the antithesis of Microsoft, which has built itself around traditional software in primarily the consumer and SMB markets.”

In the world of CRM, this would be a powerful combination.

“Combining the two would sew up the market for them and put tremendous distance between them and the second and third players — SAP and Oracle,” former Salesforce SVP of product Chuck Ganapathi tells VentureBeat.

Cloud apps cometh

Perhaps more important is Microsoft’s need to make a strategic move toward a cloud-based future. Nadella has said that he wants to move his company toward a “mobile first, cloud first” approach to the enterprise, a strategy that Salesforce pretty much invented.

Microsoft’s core Windows, Exchange, and Office businesses are making money, but they are increasing being commoditized by pressure from low-cost options like Google Apps, which Ganapathi says is being sold to enterprises for “next to nothing.” This means that Microsoft has to look for ways to replace that revenue in the future.

“The application layer of the stack is booming and Salesforce is its darling,” Ganapathi says. “Additionally, integrating Salesforce natively with Microsoft’s productivity tools [Outlook and Office] could really cement Exchange’s position in the email world and guard against Gmail’s advancements while also improving CRM adoption,” he says.

The marketing cloud

If Microsoft does end up taking out Salesforce, we may all look back 10 years from now and see that it was really all about the marketing cloud.

“Marketing doesn’t have a core technology platform the way other departments do,” says VentureBeat Insight analyst Andrew Jones. “But a marketing cloud has the potential to become that platform. Whoever makes the biggest inroads there is going to make a lot of money, as marketing budgets continue to grow.”

Chief marketing officers (CMOs) are becoming increasingly important (and well-funded) buyers of IT, and right now Microsoft is “nowhere in that equation,” as Ganapathi puts it.

Salesforce, on the other hand, has a well-developed marketing cloud and does a good job competing for a share of CMO and chief sales officer budget. Microsoft would have to go a long way to bring its own marketing cloud to that level, so it might be a better idea to buy one rather than build it.

Microsoft can afford it

Microsoft, with its $95.4 billion in cash and short-term investments, is certainly in a financial position to buy Salesforce. Oracle could arguably buy Salesforce, helped by its $13.7 billion in cash and a further $30 billion in marketable equities that could be liquidated quickly. SAP is far less likely, having only $5 billion in cash on hand.

There’s history

The CEOs of the two companies, Salesforce’s Mark Benioff and Microsoft’s Nadella, are friends. That’s well-known. And they see the world in a similar way: Nadella, after all once ran cloud operations at Microsoft.

There’s business history, too. The two companies announced some surprising product integrations in 2014 —including Salesforce1 for Windows, Salesforce for Office, and Power BI for Office 365 and Excel integrations with Salesforce.

On March 18, Salesforce launched a new app that lets users of Outlook 2013, Office 365, Outlook for Mac, or the Outlook Web App to check out Salesforce CRM information right from within their inbox.

And a Reuters report from Wednesday claims that Nadella has actually made an offer for Salesforce once before.

Shared customers, verticals

“Microsoft and Salesforce have a huge number of mutual customers and a shared goal to enable productivity and lock those customers in to their solutions for good,” said Michael Cullen of SaaScribe in a VentureBeat op-ed May 1.

Salesforce and Microsoft each do business in a wide array for markets, such as airlines, banking, and health care.

In health care, for example, Microsoft provides much of the communications and coordination software that hospitals and medical groups use. It also offers the health data platform HealthVault, which providers use to access personal patient record data and fitness tracking data.

Salesforce wants to increase its presence in health care, and is now working with well-established diagnostic instrument vendor Phillips to do so. A number of new digital health apps are now being built on the Salesforce cloud platform as well.

No marriage is perfect

Of course, Microsoft-and-Salesforce coupling would cause some messiness. The two companies already share lots of common customers, who might be confused by the mishmash of services, especially if they begin to merge (Salesforce CRM built into Microsoft email, for example).

But the marriage of the software pioneer and the cloud giant could be a powerful one, and it would surely reshape the enterprise software and service business in a big way.

After giving up on a potential T-Mobile merger, Sprint owner SoftBank is now looking to acquire an entirely different sort of company: DreamWorks Animation.

Yes, one of Japan’s largest telecom companies could soon own the studio behind Shrek and How to Train Your Dragon, reports the Wall Street Journal and Hollywood Reporter. The deal could be worth as around $3.4 billion, sources say (DreamWorks Animation’s market cap currently sits at around $2 billion).

SoftBank CEO Masayoshi Son positioned the T-Mobile acquisition as something that could have created a stronger competitor to AT&T and Verizon. But federal regulators never warmed to the deal, preferring to keep four major wireless carriers around. SoftBank ended up throwing in the towel on that merger in early August.

While DreamWorks Animation, which spun out of the DreamWorks studio in 2004, seems like an odd choice for SoftBank, it could be a gateway to exclusive content for Sprint’s subscribers. I’m not sure if Sprint will sell more phones and plans if they were the only carrier to have exclusive Shrek content, but Son, the second-richest man in Japan, likely has some intriguing possibilities in mind for the deal.

Given DreamWorks Animation’s own struggles over the past few years, with few big box office successes (like the Shrek and How to Train Your Dragon series) and a string of outright failures, an acquisition would probably be the best possible outcome for the studio.

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]]>0Your weekend WTF: SoftBank reportedly eyes DreamWorks Animation acquisitionDirecTV shareholders approve $48.5B AT&T takeover dealhttp://venturebeat.com/2014/09/25/directv-shareholders-approve-48-5b-att-takeover-deal/
http://venturebeat.com/2014/09/25/directv-shareholders-approve-48-5b-att-takeover-deal/#commentsThu, 25 Sep 2014 15:30:06 +0000http://venturebeat.com/?p=1561268Shareholders of satellite TV service provider DirecTV have voted in favor of accepting a very lucrative acquisition offer by communications company AT&T, the companies announced today. AT&T announced its plans to take over the satellite TV company back in May, with the deal being worth $48.5 billion, as VentureBeat previously reported. The move would give […]
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Shareholders of satellite TV service provider DirecTV have voted in favor of accepting a very lucrative acquisition offer by communications company AT&T, the companies announced today.

AT&T announced its plans to take over the satellite TV company back in May, with the deal being worth $48.5 billion, as VentureBeat previously reported. The move would give AT&T a nationwide TV service that could theoretically compete with the likes of Netflix, Hulu, and others while also giving the telecom another service to bundle with its wireless data, broadband Internet, and phone services.

DirecTV said 99 percent of its shareholders voted in favor of the AT&T deal, which still needs federal regulatory approval before becoming official. The companies expect the deal to gain that approval by early 2015, but that might be wishful thinking based on the number of major decisions the Federal Communications Commission still has to deal will as well as the amount of negative attention the deal is getting from critics.

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AT&T already operates its own TV service, Uverse, but it is restricted to select regions across the country and not available everywhere like DirecTV. For this reason, AT&T argues, a merger would not reduce the amount of competition in the pay-TV space. It’s a flimsy argument, and it certainly doesn’t help that the FCC is also in the middle of determining whether to approve a merger from Comcast and Time Warner Cable for many of the same reasons.

Developing.

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]]>0DirecTV shareholders approve $48.5B AT&T takeover dealRebellious French carrier Free bids $15B for rebellious U.S. carrier T-Mobilehttp://venturebeat.com/2014/07/31/rebellious-french-carrier-free-bids-15b-for-rebellious-u-s-carrier-t-mobile/
http://venturebeat.com/2014/07/31/rebellious-french-carrier-free-bids-15b-for-rebellious-u-s-carrier-t-mobile/#commentsFri, 01 Aug 2014 00:04:09 +0000http://venturebeat.com/?p=1517704Just as Sprint is sweating it out in front of its hoped-for acquisition of insurgent U.S. cellular carrier T-Mobile, a French carrier called Free drops in with a $15 billion bid for T-Mobile.
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Iliad said it offered $15 billion in cash for 56.6 percent of T-Mobile US, or $33 a share. That’s considerably less than what others have offered for the company. Reports have said that T-Mobile and Sprint have been in serious talks for the past few months about a merger deal between the two carriers valued at more than $30 billion.

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For Iliad, the T-Mobile offer represents a chance to jump into the U.S. cellular market, which is the richest market in the world. Iliad believes that deal has no anti-trust implications because it is a foreign carrier. (And that might carry some weight, given that T-Mobile’s origins are in Germany — its parent company is Deutsche Telekom.)

The man behind the Illiad (which operates under the Free brandname) is Xavier Niel, a dynamic French entrepreneur and businessman. Think of him as the Richard Branson of France, complete with long hair and an outspoken, rebellious attitude.

It may take some serious chutzpah and salesmanship to push this deal through, but Niel may have it.

“He always does thing very creatively, outside of normal business practice,” Scality CEO and Niel acquaintance Jerome Lecat told VentureBeat Thursday. “He will exploit any room for interpretation in regulations, and will always try to spend as little money as possible.”

As it stands, Niel and company are offering far less for T-Mobile than Sprint is prepared to pay.

“I don’t know what is his twist is on this deal, but I doubt he would have made an offer if he did not have a chance,” Lecat says.

T-Mobile is saying only that it received the Iliad offer, nothing else for now.

However, in a call with analysts after the company’s quarterly earnings announcement Thursday, T-Mobile’s CEO John Legere — another long-haired, outspoken executive — stressed that his company has several deal options, not just the one with Sprint.

T-Mobile is the fourth largest carrier in the U.S., just behind Sprint. By subscriber count, both Sprint and T-Mobile trail AT&T and Verizon by a wide margin. It is thought that a merger of the two would create a worthwhile competitor to the two market giants.

Who knows — there may be a budding bromance between Niel and Legere.

But there’s no doubt Legere also received a call from Sprint CEO Dan Hesse today to ask if they were still buddies.

T-Mobile had a market value of about $26 billion at the close of the markets Thursday. Sprint is valued at $30 billion. Sprint shares lost 5.3 percent of their value, falling to $7.35 with the news of Iliad’s offer today.

Would this be beneficial to both Sprint and T-Mobile, as well as to the overall wireless marketplace? In a word – yes.

AT&T and Verizon have run away with the market in the US over the past few years as Sprint has fallen further behind in subscriber base and core networks. T-Mobile has been aggressively pricing its services and has gained some market share as a result (mostly by taking subscribers from Sprint), but lags far behind both AT&T and Verizon in subscriber base.

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We’ll be exploring the changing wireless landscape at MobileBeat 2014, and what it mans for mobile businesses.

In fact, Sprint and T-Mobile combined would still have a smaller subscriber base than the big two players — although they’d at least finally approach the scale of those telecom giants.

The US wireless market is becoming saturated and growing at a smaller rate than in the past few years. As a result, AT&T is looking to acquire international carriers to increase their size and scale (which makes it easier to negotiate with suppliers) and boost revenues when the local market may not offer the necessary growth. Verizon will likely eye acquisitions as well and for the same reasons.

This leaves Sprint with a declining market share, an aging network technology footprint, and consistent subscriber loss due to the aggressive nature of the competition. T-Mobile’s network is better, but still sub-par coverage-wise.

Sprint and T-Mobile work on two different base technologies. Does that present a problem in merging? It would not be an easy combination for legacy devices and subscribers.

But LTE is the great equalizer in the sense that it no longer matters about CDMA (Sprint) vs. GSM (T-Mobile). No doubt it will be years before all the existing subscribers on either network fully transition to LTE, so a combined company would have to maintain two network footprints for at least 3-4 years (Sprint did this once before when it acquired the iDen network). That keeps the costs of operations higher than they would like, but it’s doable. The companies can also incentivize users to upgrade to new devices sooner allowing a quicker refresh.

The biggest problem carriers face is the shortage of spectrum required to continually improve coverage and increase speeds. Between them, Sprint and T-Mobile would own a good deal of spectrum making it an attractive combination. Further, with this relatively under loaded spectrum comes the ability to offer new and competitive services that excess capacity enables. This could be a competitive advantage against AT&T and Verizon, particularly if the combined company adopted the aggressive pricing and “in your face” marketing of T-Mobile.

A merger won’t be an easy proposition. Other than the difficulty in putting together a financial package, obtaining regulatory approval is the biggest challenge. But given Sprint’s subscriber losses, and T-Mobile and Sprint individually being substantially below the 110M+ or so subscribers at AT&T and VZW, you could make an argument that they must combine to survive and/or thrive in the marketplace. And I think the numbers support that conclusion.

Consumers would do better with a viable third carrier bringing some competitive aggressiveness to the market, than with two weak third and fourth place contenders.

Since Sprint is primarily owned by a foreign investor (Softbank), would that be a regulatory hurdle? I don’t think the regulators would balk over Japanese ownership (VZW was substantially foreign owned by Vodafone for many years). It would likely be different if it were Chinese ownership, but Japan as a close ally would not have the same political ramifications, in my opinion.

I believe it would be in the best interest of both Sprint and T-Mobile to combine assets, creating a viable third competitor in the US where the minor players are shrinking.

T-Mobile is “buying” more subscribers through hefty payments/rebates, but can’t continue to do that forever and make a profit. The argument about lowering competition with fewer choices is only valid when the competition is on equal footing and has the potential to make a difference in cost structure and/or products. At this point, with Sprint so far behind, you can’t make that argument. Even T-Mobile has limited marketing capability against the duopoly of Verizon and AT&T.

Bring on a viable third competitor and we might all benefit..

Jack Gold is the founder and principal analyst at J.Gold Associates, based in Northborough, Mass. He covers the many aspects of business and consumer computing and emerging technologies.

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]]>0Should Sprint buy T-Mobile?Sprint/T-Mobile tie-up is all about cell towers, base stations, & city politicshttp://venturebeat.com/2014/06/05/sprintt-mobile-tie-up-is-all-about-cell-towers-base-stations-city-politics/
http://venturebeat.com/2014/06/05/sprintt-mobile-tie-up-is-all-about-cell-towers-base-stations-city-politics/#commentsThu, 05 Jun 2014 20:58:50 +0000http://venturebeat.com/?p=1486118The rumors of a deal to combine Sprint and T-Mobile surged again Wednesday as new reports said the two carriers had agreed on most of the terms for a summer merger. Sprint, which is owned by Japanese firm Softbank, is reportedly offering a deal worth $40 per share (half stock and half cash), Bloomberg reports. The deal would give […]
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The rumors of a deal to combine Sprint and T-Mobile surged again Wednesday as new reports said the two carriers had agreed on most of the terms for a summer merger.

Sprint, which is owned by Japanese firm Softbank, is reportedly offering a deal worth $40 per share (half stock and half cash), Bloomberg reports. The deal would give T-Mobile owner Deutsche Telekom a 15-percent stake in the newly combined company, Bloomberg says.

For a variety of reasons, mostly economic, Sprint and T-Mobile have been under pressure to join forces to have a chance at competing with market leaders Verizon and AT&T.

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When rumors of the merger began swirling months ago, some wondered how the two companies would swim through the muck of network consolidation, when the two networks run on very different cellular technologies. Others saw the main problem being whether or not the merger had a chance at getting regulatory approval.

But neither of these things are the core issue, according to a source close to the situation. It’s really all about base station density. Sprint doesn’t have it.

As someone who has conducted national tests of the Big Four wireless services for the past five years, I can tell you that both Sprint’s and T-Mobile’s Achilles Heel is their lack of broad and consistent cellular coverage.

With Verizon and AT&T, you have a good chance of driving all over town and keeping steady voice and data service. And when you drive outward from city center, you have a good chance of keeping a solid connection until you are way outside city limits.

Not so with T-Mobile and Sprint. Both carriers have suffered from spotty coverage in town and thin coverage outside major metro areas. Part of the reason for that, in Sprint’s case, is that Sprint relies on spectrum in the 2400 2.5 GHz band, which it got with its 2013 acquisition of the WiMax/LTE carrier Clearwire.

The 2.5 GHz spectrum is less efficient than, say, the 700 mHz band used for Verizon and AT&T LTE service. Signal doesn’t carry as far on that spectrum band, and it has trouble moving through walls and around physical obstacles.

So Sprint has to install more base stations than other carriers to provide sufficient cellular capacity in a given coverage area. They must either build new cell towers for the radios or install new base stations on existing buildings or other structures.

Of course the carrier needs a franchise agreement from the city to erect new cell towers or install new base stations on public structures. For this it must petition the city for permission, then attend hearings where members of the public are invited to give reasons for or against. It can turn into a long and drawn-out affair.

“The Verizon guys I work with down in Southern California spend most of their time in city council meetings,” my industry source said.

With a T-Mobile merger, Sprint could get its hands on T-Mobile’s existing franchise agreements, as well as access to thousands of T-Moble cell towers, without having to once set foot inside a city hall.

The country’s third and fourth largest wireless carriers, Sprint and T-Mobile, are planning to announce a merger later this summer, multiple publications are reporting today.

SoftBank-owned Sprint is allegedly offering a deal worth $40 per share (half stock and half cash), reports Bloomberg. The deal would give T-Mobile U.S.A. owner Deutsche Telekom AG a 15 percent stake in the newly combined company, the report states. One thing that hasn’t been determined is what the management of a combined Sprint-T-Mobile entity would look like.

It’s possible that SoftBank could see some competition for buying T-Mobile from the other two major carriers, Verizon and AT&T, according to Bloomberg’s report. That said, I wouldn’t expect either carrier to make a serious bid. Verizon is already the largest carrier in the country and would face lots of scrutiny from federal regulators. And AT&T is sort of tied up with its plans to acquire DirecTV for $48.5 billion, which also faces heavy criticism from regulators.

We’re reaching out to both companies for further comment and will update this post with any new information.

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]]>0Sprint & T-Mobile may announce merger plans this summerWhy you should hate the AT&T-DirecTV mergerhttp://venturebeat.com/2014/05/19/why-you-should-hate-the-att-directv-merger/
http://venturebeat.com/2014/05/19/why-you-should-hate-the-att-directv-merger/#commentsMon, 19 May 2014 21:02:58 +0000http://venturebeat.com/?p=1476050Update 9/25/2014: DirecTV shareholders approve $48.5 billion AT&T deal It’s hard to imagine that AT&T’s $48.5 billion merger with satellite TV service provider DirecTV will result in increased competition for consumers. That said, I’m sure AT&T will do its best to “prove” this will indeed be the end result. But reasonably speaking, there are a […]
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But reasonably speaking, there are a few things you can probably expect to happen should that merger gain approval from federal regulators.

Media consolidation as a business strategy

To really understand what effect a ATT-DirecTV merger would have on competition, you’ll have to think about the long term. Should federal regulators approve this deal, it will solidify the notion that consolidation is the most reasonable path for media companies looking for a solid business strategy.

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That’s the wrong message we should be sending to these companies, which could be spending billions of dollars to innovate and upgrade existing services to grow the business instead of just merging.

“For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast, gigabit-fiber broadband service to every single home in America,” president of media advocacy group Free Press Craig Aaron said in a statement to VentureBeat.

“But these companies don’t care about providing better services or even connecting more Americans. It’s about eliminating the last shred of competition in a communications sector that’s already dominated by too few players,” he added.

Fewer real choices

A DirecTV service under AT&T might actually have more clout than the current iteration, but that would come at a cost that may not manifest itself for years. AT&T already has relationships for content licensing through its Uverse cable TV service, which could be used or combined when negotiating for DirecTV.

Why does this matter? Well, basically it means that Uverse and DirecTV’s programming will likely be very similar if not identical over the next few years. That means you’ve got one less choice for a pay TV service if you’re unhappy with AT&T as a cable TV provider.

“I’m skeptical that this deal is in consumers’ best interest,” said Sen. Al Franken (D-Minn.) in a statement about the merger.

“We’re moving toward an industry with fewer competitors — where corporations are getting bigger and bigger and gaining more and more control over the distribution of information. This hurts innovation, and it’s bad for consumers, who have been getting squeezed by higher bills.”

Franken said he plans to raise these issues with his fellow members of Congress.

Higher prices

AT&T likely wants this DirecTV merger to go through so that it can bundle the TV service along with its wireless cellphone plans. Both of these services are available nationwide, which would give AT&T an advantage over other carriers who don’t have a national option for bundling.

It also allows AT&T to charge more if you don’t want to bundle services while still being able to tell people prices are coming down.

For further proof that prices won’t come down, you need only look to the other massive media-company mashup being discussed, the Comcast-Time Warner Cable merger. Neither of those companies promised lower rates for television or Internet services, citing the high cost of content licensing agreements and expensive costs associated with upgrading existing broadband infrastructure.

Don’t be surprised if the same is true for AT&T, starting with a potentially much more expensive licensing deal to renew DirecTV’s NFL Sunday Ticket.

Of course, AT&T might also get a nice price break after becoming a more powerful player in the pay TV space, too.

“Two providers are going to control well over half of the pay TV market. More than half of all subscribers will belong to AT&T or Comcast. This gives leverage back to the service providers,” IDC analyst Greg Ireland told VentureBeat.

“If you’re the programmer, you have only two major distributors to work with.”

Ireland said this could cause programmers to be a bit more willing to negotiate lower pricing but that willingness is no guarantee the savings will get passed down to consumers.

Appearance of more choice

Should federal regulators approve an AT&T-DirecTV merger, it would likely be after the newly merged company agreed to some stipulations. One of those could be that AT&T has to sell off its existing TV service Uverse to a competitor. (Either that or all Uverse customers would be transitioned to DirecTV.)

Having recently forged a tentative agreement to take a large chunk of subscribers from Comcast-TWC, Charter might be one company that could take these Uverse customers. Alternately, the newly formed SpinCo (a new cable provider entity created by Comcast and Charter, post-Comcast/TWC merger) could also absorb some of those AT&T customers. And let’s not forget Cablevision or Cox.

One important thing to point out here is that none of these competitors are large enough to compensate for the loss of a major TV service provider like DirecTV.

VentureBeat staff writer Mark Sullivan contributed to this article.

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]]>0Why you should hate the AT&T-DirecTV mergerAT&T & DirecTV's $48.5B merger is contingent on… NFL Sunday Ticket? Yup.http://venturebeat.com/2014/05/19/att-directvs-48-5b-merger-is-contingent-on-nfl-sunday-ticket-yup/
http://venturebeat.com/2014/05/19/att-directvs-48-5b-merger-is-contingent-on-nfl-sunday-ticket-yup/#commentsMon, 19 May 2014 15:26:42 +0000http://venturebeat.com/?p=1476029AT&T has agreed to a merger with satellite TV provider DirecTV in a deal worth $48.5 billion, but the deal came with a few major stipulations.
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AT&T has agreed to a merger with satellite TV provider DirecTV in a deal worth $48.5 billion, but the deal came with a few major stipulations. One of the most glaring: AT&T will be able to get out of the deal if DirecTV loses its very popular NFL Sunday Ticket content agreement, according to the SEC document filed along with the merger announcement yesterday.

NFL Sunday Ticket provides DirecTV customers with access to a ton of game coverage during the regular football season, which means you’ll never have to miss a game just because your local broadcast affiliate decided not to show your favorite team.

“The parties also have agreed that in the event that DIRECTV’s agreement for the ‘NFL Sunday Ticket’ service is not renewed substantially on the terms discussed between the parties, the Company may elect not to consummate the Merger, but the Company will not have a damages claim arising out of such failure so long as DIRECTV used its reasonable best efforts to obtain such renewal,” the SEC document states.

That means that while AT&T has the option to get out of the merger if the NFL content deal isn’t renewed, it won’t be able to collect damages for the time and resources spent trying to make the merger happen.

I’m not entirely sure AT&T would want to exercise its right to end the DirecTV merger should the NFL decide not to renew. The deal offers AT&T plenty of advantages — namely the ability to bundle a nationwide TV service along with its wireless services. (Such a move could finally make DirecTV a real competitor with cable TV services, too.)

This wouldn’t be the first time AT&T has agreed to a unique set of terms when negotiating a gigantic merger. Years ago the company agreed to pay a hefty sum and release a portion of its wireless spectrum if its deal to merge with T-Mobile didn’t go through.

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]]>0AT&T & DirecTV's $48.5B merger is contingent on… NFL Sunday Ticket? Yup.Why culture integration is just as important as spreadsheets for M&Ahttp://venturebeat.com/2014/04/29/why-culture-integration-is-just-as-important-as-spreadsheets-for-ma/
http://venturebeat.com/2014/04/29/why-culture-integration-is-just-as-important-as-spreadsheets-for-ma/#commentsTue, 29 Apr 2014 19:45:12 +0000http://venturebeat.com/?p=1462828GUEST: With nearly $3 trillion in play last year, the land of mergers and acquisitions would be the world’s fifth largest country, nestling in comfortably between Germany and France. The value created by this imaginary land is highly disputed, however. KPMG published the most cited report on M&A value creation in 1999, noting that only 17 percent of mergers created excess economic value. […]
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GUEST:

With nearly $3 trillion in play last year, the land of mergers and acquisitions would be the world’s fifth largest country, nestling in comfortably between Germany and France.

The value created by this imaginary land is highly disputed, however.

KPMG published the most cited report on M&A value creation in 1999, noting that only 17 percent of mergers created excess economic value. Regardless of the successful percentage of mergers, there is a thread that holds the more credible M&A research together.

The people factor.

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KPMG’s research highlighted that when acquiring companies focused on the people issues, specifically management and cultural differences, they were both independently responsible for upping the odds of success by 26 percent.

A more recent academic meta-analyses in Organization Science (Do Cultural Differences Matter in Mergers and Acquisitions?, Stahl and Voigt, 2008) has attempted to unwind the complexities of cultural differences to highlight its affects. One of the key findings was that while the cultural affects on economic outcomes were mixed, those differences often led to less shared identity, reduced feelings of positivity toward the company and less trust.

While the findings are mixed on economic success (which neither proves or disproves KPMG’s findings), the economic measure is often quite flawed as it doesn’t account for economic success more than a year after the transaction.

It is only at this point that inertia flags and the effects of those reduced feelings of commitment to the company and trust hit the bottom line.

With the long-overdue recognition of the importance of the employment brand, these matter now more than ever.

To avoid this kind of hit to the bottom line, several action items need to occur during the diligence and integration phase.

1. Understand the acquired culture. Too often, ‘culture’ is measured skin deep, which is to say only at the executive level. But nine out of 10 companies we work with at RoundPegg have major cultural differences between the executive team and the rest of the organization.

The majority of the work is done in the bowels of the company. These are the workers who will have to come in and mesh with your own. Identify the power centers in the acquired company, how they communicate, what they reward and how they make decisions.

2. Put a cultural integration plan in place. It’s difficult to start this process with your counterparts prior to a deal going through, but that time is critical. The strategic plan is always a part of the process, but rarely is one focused on cultural integration. By collectively identifying the strengths of the two companies and the various departments, you will be able to identify where the biggest risks lie and to put plans in place to help mitigate.

Which managers will struggle most with their new teams? What teams are going to have the most difficult time working within the new confines? What teams are at risk of creating dissent and discord?

Focus on which managers are best equipped to lead the ‘new’ teams from a cultural perspective, not just a skill perspective. Give them the insight into their new teams so they can put a custom plan in place to build team cohesion. And, most importantly, involve them in how best to evolve the culture.

3. Evolve culture*. Many times, the expectation of the acquired company is that they have to conform. Unfortunately, it is very difficult for people to change. If you tend to make unilateral decisions and enter a company that takes a more collective approach, neither side is going to tolerate it. You will think decisions are made too slowly, and they will think you are making ill-informed choices.

Instead of insisting that new workers conform, take the time to focus on the ‘new’ culture. Educate both parties to overcome the immediate and justifiable ‘us and them’ mentality. Shifting toward a culture that leverages components of both sends the message of ‘we.’

How can the strengths of each be leveraged? What behaviors will be rewarded going forward? How are those rewards decided?

*The size of the acquired company matters. If it makes up a small fraction of the new workforce, their effect on the ‘new’ culture will be minimal.

There are many valid reasons for mergers — geographic expansion, economies of scale, product extensions, etc. But too often, the due diligence is rooted in maximizing cell F72, rather than digging deep into the potential human pitfalls.

As heretical as this may be, people run companies, not Excel.

Excel is still missing the toggle to model having to work with someone whom you do not trust. Someone with whom you can’t see eye to eye. Someone who values different things and operates in a manner you just can’t fathom.

Business is personal.

Every interaction we have factors into our mental model of how much additional effort we elect to expend. Introducing foreign bodies into the organization creates countless new interactions. Some of those interactions will provide a multiplier affect. Many will not. If you knew that 60 percent of your workforce would provide 15 percent less effort, then the deal would be off immediately.

Merging companies requires thousands of worker-hours to integrate systems, processes and workforces, but scant time is spent understanding how well varying cultures will work together.

For all the effort, time and money that goes into these transactions it would stand to reason that you’d want to focus on the biggest lever you’re often buying…the worker’s effort levels.

With $3 trillion on the line, there are a lot of zeroes that are currently being left on the table. While others can debate how often these ventures are successful, we should all understand that, by focusing on the people, we could amplify the chances and magnitude of that success.

Brent Daily is the founder and COO of RoundPegg, a startup focused on improving workplace culture and engagement.

]]>0Why culture integration is just as important as spreadsheets for M&AComcast will give Charter 3.9M subscribers if TWC merger closeshttp://venturebeat.com/2014/04/28/comcast-will-give-charter-3-9m-subscribers-if-twc-merger-closes/
http://venturebeat.com/2014/04/28/comcast-will-give-charter-3-9m-subscribers-if-twc-merger-closes/#commentsMon, 28 Apr 2014 15:48:08 +0000http://venturebeat.com/?p=1461682Comcast has confirmed today its plans to divest 3.9 million subscribers to cable TV and Internet service provider Charter. The move comes as a result of Comcast’s tentative merger with Time Warner Cable, the country’s second largest TV service provider. Since the deal still needs approval from federal regulators, Comcast is hoping that by divesting […]
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Comcast has confirmed today its plans to divest 3.9 million subscribers to cable TV and Internet service provider Charter.

The move comes as a result of Comcast’s tentative merger with Time Warner Cable, the country’s second largest TV service provider. Since the deal still needs approval from federal regulators, Comcast is hoping that by divesting a portion of its subscribers, it’ll help move that process along.

These plans, of course, are dependent on the TWC merger gaining approval. This was also something Comcast initially said it would do when it first announced its merger with TWC.

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Should the deal go through, Charter will become the new second largest cable/Internet provider in the country, with 5.7 million subscribers — 1.4 million of those coming from TWC.

Additionally, Charter said it will form a new holding company (New Charter) that will own the old Charter company. This “New Charter” will also acquire a 33 percent stake in a new publicly-traded cable provider company (tentatively called SpinCo) being spun off by Comcast to serve another 2.5 million customers.

So it sounds like Comcast wants to keep some sort of control over a portion of the subscribers it is giving up. That deal is still beneficial to Charter, but it also means another big cable company is one step closer to being consolidated.

That said, I wonder how many years it’ll take before Comcast starts pushing federal regulators for a Charter merger.

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]]>0Comcast will give Charter 3.9M subscribers if TWC merger closesAhead of its TWC merger, Comcast may sell 5M subscribers to Charterhttp://venturebeat.com/2014/04/18/ahead-of-its-twc-merger-comcast-may-sell-5m-subscribers-to-charter/
http://venturebeat.com/2014/04/18/ahead-of-its-twc-merger-comcast-may-sell-5m-subscribers-to-charter/#commentsFri, 18 Apr 2014 19:45:57 +0000http://venturebeat.com/?p=1452661Comcast and Time Warner Cable are in discussions with smaller cable provider Charter to sell up to $20 billion worth of assets, according to a Financial Times report. The move comes as Comcast awaits a decision about its tentative merger with TWC, the second-largest cable and Internet service provider in the U.S., from federal regulators. […]
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Comcast and Time Warner Cable are in discussions with smaller cable provider Charter to sell up to $20 billion worth of assets, according to a Financial Times report.

The move comes as Comcast awaits a decision about its tentative merger with TWC, the second-largest cable and Internet service provider in the U.S., from federal regulators.

The assets Comcast and TWC are selling include operations in select markets that account for 3 million to 5 million subscribers. Selling subscribers was something that Comcast initially planned to do upon announcing the merger last month. And with Charter making a failed attempt to purchase TWC last year, it’ll be interested in increasing its cable service market share.

One alternative option Comcast and TWC are discussing, according to FT‘s sources, would be to section off those same 5 million subscribers into a standalone company that Charter would then take a stake in.

Either way, it looks like Comcast will be giving up subscribers.

]]>0Ahead of its TWC merger, Comcast may sell 5M subscribers to Charter5 takeaways from the Comcast-TWC merger Senate hearinghttp://venturebeat.com/2014/04/10/5-takeaways-from-the-comcast-twc-merger-senate-hearing/
http://venturebeat.com/2014/04/10/5-takeaways-from-the-comcast-twc-merger-senate-hearing/#commentsThu, 10 Apr 2014 12:30:34 +0000http://venturebeat.com/?p=1438943The fate of the open Internet is at stake over one very important decision. And yet C-SPAN 3 did not receive Super Bowl-level viewership during its three-hour broadcast of the Comcast-TWC merger Senate hearing yesterday. Fortunately for you, dear reader, we’ve assembled the highlights for you: 1. ‘Benefits’ offered by Comcast don’t require merger approval […]
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The fate of the open Internet is at stake over one very important decision. And yet C-SPAN 3 did not receive Super Bowl-level viewership during its three-hour broadcast of the Comcast-TWC merger Senate hearing yesterday.

1. ‘Benefits’ offered by Comcast don’t require merger approval

As I wrote yesterday, Comcast made a decently convincing argument for why its merger with TWC should be approved, as long as you don’t skim beneath the surface. The company’s post-merger plans include an expanded low-income high-speed Internet service tier, the quick build-out of a national Wi-Fi network, no immediate change to the level of competition, and a superior set of consumer services.

But sub-committee chair Sen. Amy Klobuchar (D-Minn.) kind of derailed much of that argument with a simple question: “So will the benefits Comcast is offering happen even if the merger isn’t approved?”

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Comcast EVP David Cohen then admitted that many of those “benefits” were initiatives that do not depend on the merger going through. This is at least true of the national Wi-Fi network, the low-income Internet Essentials service, and improvements to current TWC subscribers’ regular services (which were already in the works by TWC).

2. The Southern Senator’s ‘revelation’ about big cable

I don’t expect every member of the Senate to have a deep understanding of the broadband and television service industry. I do, however, expect them to at least read a Wikipedia article or two before sitting in on a judiciary hearing about the two largest cable providers merging.

“So, generally speaking, cable companies don’t compete with each other, is that what we’re saying?” said Sen. Lindsey Graham (R-S.C.) to a very delighted Cohen.

Graham then added that he’s a DirecTV customer who is unhappy with the service’s reliability during bad weather. It’s caused him to revisit switching to another provider. And instead of probing the cable execs with tough questions, he asked what options were available (DirecTV, Dish, TWC, and AT&T) and invited panelists to “sell” him on resubscribing. It’s not entirely self-serving because, you see, Graham is technically one of many South Carolina consumers who may encounter this problem.

“So in my case I wouldn’t be losing a choice. [And] the theory would be that I could have a new choice with [better] services through the merger, that correct?” he said.

“I should just let you take the witness seat, because that’s exactly what I’ve been saying,” Cohen replied.

DirecTV troubleshooting aside, Graham might be the only member of the committee who was swayed by Comcast’s argument — especially since he only inquired about the multichannel video business, not high-speed Internet competition.

But even that wasn’t enough to counteract one of the most vocal opponents.

3. Sen. Franken brings the heat to Comcast

Sen. Al Franken (D-Minn.), the most vocal opponent of the merger on the committee, didn’t hold back when it was his turn to address the panel.

“I understand there’s over a hundred lobbyists making the case for this deal to members of Congress,” Franken began. “I’ve also heard from over 100,000 consumers who oppose it. And I think their voices need to be heard, too.”

Franken, a former Saturday Night Live cast member and seasoned performer, has a long history of distaste when it comes to Comcast. He was also one of the biggest critics of Comcast’s acquisition of NBCUniversal back in 2012. Franken argued that giving one large company control over both the programming and the delivery of that programming would give Comcast enough power to hurt competition. His view’s on the TWC merger aren’t much more optimistic.

“My concern is, as Comcast continues to get bigger, it will have even more power to exercise its leverage and squeeze consumers,” Franken said. “I believe this deal will result in fewer choices, higher prices, and even worse service for my constituents.”

Should the merger pass, Comcast would operate in 19 of the country’s 20 largest markets, Franken pointed out. “That kind of expansion has a serious impact on competition.

Franken also pointed out that Comcast’s current stance on competition is contradictory to the stance it held when seeking approval to buy NBCUniversal. Back then there was concern that Comcast would jack up fees for NBC content for other cable providers, thus creating anti-competitive pricing. However, Comcast said this would never happen because of the presence of other “robust” cable providers, specifically naming TWC, who could file an anti-competitive claim with federal regulators.

And as previously pointed out by Senator Graham, Comcast’s current stance on competition is that there is no real competition between TWC and itself.

“So which is it Comcast. You can’t have both,” Franken said.

4. Debating TV service competition is a waste of time

The panel included a testimony by the CEO of Back9Network, an indie TV network focused on golf programming. His qualm with the Comcast-TWC merger was that Back9Network is already experiencing an inability to compete since Comcast has its own golf-focused network (Golf Channel) and doesn’t really want to pay for another. He explained that getting carriage from TV providers like Comcast is essential to his network’s business model due to TV ad revenues being much higher than revenue generated from Internet advertising.

It was a good discussion that had valid points, but it was a waste of time. Sure the big TV providers have a huge say in what channels get picked up and offered to consumers. That’s a big part of what’s driving innovation of video services on the Internet; it’s also likely why TV service subscriptions have been in steady decline for years while high-speed Internet subscriptions have risen.

The real power will be over how Internet traffic delivery is regulated, which, sadly, wasn’t mentioned nearly enough during the hearing.

5. Bashing Netflix is easier than discussing peering & net neutrality

Comcast’s Cohen told the Senate committee that paid peering, and other matters of traffic delivery, are unrelated to the principles of an open Internet and shouldn’t be included in any new set of net neutrality rules created by the FCC. This is why Comcast and other ISPs are permitted to charge companies like Netflix a fee to directly deliver traffic on their networks. Netflix’s service, in turn, is more reliable and offers higher quality video streams than if it paid another organization to deliver that traffic.

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]]>05 takeaways from the Comcast-TWC merger Senate hearingMass Relevance merges with Spredfast to form one giant social marketing platformhttp://venturebeat.com/2014/04/02/mass-relevance-merges-with-spredfast-to-form-one-giant-social-marketing-platform/
http://venturebeat.com/2014/04/02/mass-relevance-merges-with-spredfast-to-form-one-giant-social-marketing-platform/#commentsWed, 02 Apr 2014 23:19:30 +0000http://venturebeat.com/?p=1298468The new entity will operate under the Spredfast brand and be able to provide clients with a much more comprehensive social marketing platform, the companies claim.
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Mass Relevance is a company that provides advertisers and big brands with an easy way to manage the flow of social content (updates and activity from Facebook, Twitter, LinkedIn, Google+, Bazaarvoice, YouTube, Foursquare, and others) from fans/consumers, and then actually use that content to enhance your marketing strategy.

One highly visible example of this would be President Barack Obama’s Twitter Town Hall event, which used Mass Relevance to field questions and display tweets on-screen. Mass Relevance’s service has proved popular among advertisers that wish to show case social content (like tweets) within commercials or TV shows that want to interact with fans in real-time during a broadcast, as VentureBeat previously reported.

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Spredfast, by contrast, is focused on providing tools that allow big companies or brands to manage all that social activity, including being able involve a large portion of a company’s workforce when doing social marketing and promotion.

The new entity will operate under the Spredfast brand and be able to provide clients with a much more comprehensive social marketing platform, the companies claim. Together the Austin, Tex.-based companies have over 600 customers (including all five major U.S. TV networks) and drive more than 15 billion monthly impressions to social content across 84 different countries.

“By teaming up, we’ll give marketers access to every piece of social data submitted in real-time, so they can uncover conversations that matter to their brand and build shared experiences that allow them to interact with their audience, both one-to-one and one-to-many,” said Spredfast CEO Rod Favaron in a blog post about the merger.

“We built Mass Relevance to connect relevant conversations from social networks and fuse them into a customer’s brand story. Three years later, we are honored to align with our neighbors, another Austin-based company, to complete the circle of bringing audience participation into every aspect of marketing,” said Mass Relevance founder and CEO Sam Decker in a statement.

Favaron will continue as Spredfast’s leader, while Mass Relevance founder Sam Decker will serve as executive adviser to the company and join its board of directors.

Founded in 2008, Spredfast has previously raised a total of $64.1 million in funding to date, while Mass Relevance raised $5.5 million in total funding. The merged company will have over 350 employees operating out of Austin, San Francisco, Chicago, New York, London, and Sydney.

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]]>0Mass Relevance merges with Spredfast to form one giant social marketing platformThe Comcast-Time Warner Cable merger goes in front of the Senate on March 26http://venturebeat.com/2014/02/25/the-comcast-time-warner-cable-merger-goes-in-front-of-the-senate-march-26/
http://venturebeat.com/2014/02/25/the-comcast-time-warner-cable-merger-goes-in-front-of-the-senate-march-26/#commentsTue, 25 Feb 2014 15:45:42 +0000http://venturebeat.com/?p=981589A merger would mean one giant supercompany that would have greater influence, more resources, and even less competition -- although that last part is greatly disputed by the two companies, of course.
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A lot of people and consumer advocates across the country are up in arms because Comcast is the country’s largest operator of cable TV and high-speed Internet service, followed by TWC as the second-largest. A merger would mean one giant supercompany that would have greater influence, more resources, and even less competition — although the two companies dispute that last part, of course.

The hearing itself is March 26 and focuses on what this merger means for average consumers. The Senate wants to know how a Comcast/TWC super ISP would affect market competition, TV and Internet pricing, and more.

“The merger of Comcast and Time Warner Cable touches on important policy questions bout how Americans access these valuable services,” said Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) in a statement.

“It also presents a critical moment to discuss net neutrality principles that have allowed the Internet to remain an open marketplace for ideas,” Leahy said.

The most immediate threat to the Comcast/TWC merger is still in gaining approval from both the Federal Communications Commission and the Justice Department, but these two companies should be as or more worried about speaking to the Senate. While the deal could go through, the Senate may craft new legislation to limit cable operators in the future. I’d expect the same senators that opposed the Comcast/NBCUniversal deal (*ahem* Sen. Al Franken [D-Minn.]) to speak up loudly during the merger discussions.

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]]>0The Comcast-Time Warner Cable merger goes in front of the Senate on March 26Comcast’s weaksauce pro-TWC merger argument in 4 quoteshttp://venturebeat.com/2014/02/13/comcasts-weaksauce-pro-twc-merger-argument-in-4-quotes/
http://venturebeat.com/2014/02/13/comcasts-weaksauce-pro-twc-merger-argument-in-4-quotes/#commentsThu, 13 Feb 2014 23:45:49 +0000http://venturebeat.com/?p=897161The country’s largest cable operator, Comcast, wants to merge with the second-largest cable, operator Time Warner Cable. And if you ask Comcast, this would be a huge win for everyone involved. To back up this sentiment, top executives from Comcast took to the phones this morning to answer questions from members of the news media. […]
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The country’s largest cable operator, Comcast, wants to merge with the second-largest cable, operator Time Warner Cable. And if you ask Comcast, this would be a huge win for everyone involved.

To back up this sentiment, top executives from Comcast took to the phones this morning to answer questions from members of the news media. And boy, were those answers weak — weaksauce, to be precise.

The cable industry doesn’t have the greatest level of competition. Part of this is due to the practicality of providing an infrastructure that runs throughout different regions. Most areas have only one or two cable operators with access to an available infrastructure. Also, only four or five cable operators (at best) are vying for business across various markets across the country.

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To put this in perspective, any major supermarket chain has a far greater number of brands selling jars of pickles compared to cable operators in the United States.

Somehow, Comcast doesn’t think reducing the number of major cable operators from four to three will do anything to harm competition, affect consumer choice, or alter innovation. Unfortunately, the company’s logic isn’t exactly flawless, as demonstrated by the following quotes from today’s call.

No break fee? No problem … and no risk

Usually, major merger deals like this contain a “break fee” that guarantees the smaller company will get a sum of money if things fall through. The break fees can be millions or even billions, which the larger company involved in the merger isn’t worried about because it wouldn’t have bothered trying to make this deal happen if it wasn’t confident that everything would work out. For instance, AT&T’s merger with T-Mobile included a $4 billion break fee.

Comcast is offering no break fee, which to some might indicate a lack of confidence that the merger will happen since Comcast isn’t on the hook for anything like AT&T was. Here’s both TWC and Comcast’s explanation:

“I actually disagree. I think the absence of a break fee reflects our confidence to get the transaction done,” said TWC chairman Rob Marcus during a call with journalists this morning. “Rather than focus on the consequences of a transaction that doesn’t happen, we’re going to spend our energy closing.”

Afterward, Comcast CEO Brian Roberts gave his company’s explanation for the lack of break fee: “I don’t think Comcast has ever had a reverse break fee in any transaction. It’s something we’ve never done, so this is not unusual.”

Comcast’s biggest motivation for swallowing TWC is … hard to believe

One of the biggest “value propositions” for Comcast’s decision to merge with TWC wasn’t the potential to make more money by swallowing up a swath of cable TV subscribers, nor was it to thwart the plentiful level of competition. These two items stand out as the most obvious “motivators” of Comcast’s merger with TWC, yet here’s what Roberts’ had to say:

“I think the opportunity to invent products, services, and customer experiences both in residential and business services is clearly the prime motivator here,” he said.

Consumers will probably thank Comcast for giving them the choice of Comcast

Oh, Comcast. A merger of this scale means people have fewer choices for cable/broadband Internet service. But since many cable operators are the only available option within most areas, there really isn’t any competition to begin with. In fact, there are so few cable operators that there’s a good chance that moving to a new locale won’t provide you with a different option for cable service. Every time you move, you have the option of Comcast or Comcast … plenty of evenly matched options. Roberts instead delivers a peachy outlook for TWC’s current subscribers that actually includes giving them more competition, although I’m not entirely sure how.

“When we look to Time Warner’s consumers, we believe in continuing [to] make it more valuable, to give them more competition, give them more choices, speed up the Internet as we’ve done each of the last 12 years,” Roberts said.

Hey, not all TWC subscribers will go to Comcast. Just most of them

Comcast said it’s “prepared” to divest 3 million TWC subscribers as part of its merger deal. Those 3 million will likely get swallowed up by the likes of Charter, Cox, Cablevision, and a small handful of others. What’s left is another 8 million, which will give Comcast a total of 30 million. That puts the company just below the FCC’s 30 percent ownership cap. That means this merger is far more likely to happen whether you like it or not.

“We think we’ve threaded the needle in an appropriate way. We’re proposing a transaction that comes under the third rail that was previously identified by the FCC — even though that third rail was found to be unsupported by the DC circuit [courts]…,” explained Comcast executive vice president David Cohen during a public call addressing regulatory issues related to the merger. “I really don’t think anyone is going to be able to make a credible argument that with less than 30 percent of the market… and the high level of competition between satellite, telecos, and cable.”

Cohen does make a good point regarding the FCC’s current restrictions on giant mergers. But for now, we’ll have to wait and see if U.S. regulators are able to find other reasons to reject Comcast’s merger with TWC.

Updated at 1:45 PM PT with additional comments and details from the CEOs of oDesk and Elance

Two crowdsourcing Goliaths are joining forces to fight off those pesky Davids.

Elance and oDesk, two of the largest online marketplaces for freelancers, today announced their intention to merge. The deal is expected to close within the next four months, pending regulatory approval.

The newly joint entity (which has yet to be named) will boast a community of about eight million freelancers — about five million from oDesk and three million from Elance. Together, the two companies have about $750 million in joint billings for 2013.

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The two platforms will continue to operate independently under their separate brands. Behind the scenes, however, the older Elance seems to be taking the lead. Elance CEO Fabio Rosati will become chief executive of the new enterprise, with oDesk CEO Gary Swart assuming the role of “strategic advisor.”

Although the companies’ executives have been acquainted for many years, frequenting the same conference circuits, discussions of a merger started just a few weeks ago.

“If it’s meant to be, it happens very quickly,” noted Elance’s Fabio Rosati in a conversation with VentureBeat.

“By achieving greater scale, we can start thinking about our business to the point where we can easily see the company achieving the scale of an Amazon or a LinkedIn in this world of online work.”

The companies say the merger will help accelerate growth and enable them to better connect freelancers with the right opportunities.

“The single most meaningful advancement that will come out of our combination will be the ability to create faster and better matches between opportunity and talent, and deliver that on the shoulders of a much more extensive data science team and engineering operation,” said Rosati.

As oDesk and Elance await regulatory approval, the companies are limited in their ability to collaborate, though they’ve already agreed on some “guiding principles.” They plan to completely merge their boards and management teams, and they’re investigating moving from their offices in Redwood City (oDesk) and Mountain View (Elance) to one central location in San Francisco.

In the online freelance space, the primary Elance-oDesk competitor is Freelancer.com, which has nearly 10 million users, though the two companies also contend with design marketplace 99Designs and mini-task site Fiverr, among others. oDesk has raised about $46 million in venture capital, while Elance has raised roughly double that amount.

But that’s not the competition the companies are focused on; they’re going after the thousands of agencies that form the bulk of the $422 global staffing industry.

“Together, [our] companies have done $2 billion in a market that’s more than $422 billion,” said oDesk CEO Gary Swart. “We’re not even scratching the surface of the disruption that’s ripe for the 1.0 way of working.”

Or, in Rosati’s words: “We view ourselves as the Davids in an industry full of Goliaths.”

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]]>2oDesk and Elance merge, forming one giant freelancer company (updated)A Sprint-T-Mobile merger makes perfect sense, except for all the obvious problemshttp://venturebeat.com/2013/12/14/a-sprint-t-mobile-merger-makes-perfect-sense-except-for-all-the-obvious-problems/
http://venturebeat.com/2013/12/14/a-sprint-t-mobile-merger-makes-perfect-sense-except-for-all-the-obvious-problems/#commentsSat, 14 Dec 2013 23:44:11 +0000http://venturebeat.com/?p=872675Sprint is mulling a $20 billion-plus acquisition of T-Mobile US, if you believe the rumors. The potential acquisition, reported yesterday by the Wall Street Journal, would combine the current #3 and #4 wireless carriers (by revenue) in the U.S. The combined entity would still be #3, after Verizon and AT&T Wireless, but it would theoretically […]
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Sprint is mulling a $20 billion-plus acquisition of T-Mobile US, if you believe the rumors.

The potential acquisition, reported yesterday by the Wall Street Journal, would combine the current #3 and #4 wireless carriers (by revenue) in the U.S. The combined entity would still be #3, after Verizon and AT&T Wireless, but it would theoretically be in a stronger position to compete with its bigger rivals.

The rumor was enough to send T-Mobile’s stock up by 8.6 percent yesterday, its biggest one-day jump in a year, Bloomberg reported.

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And it makes perfect sense … until you start considering the particulars.

First of all, there are regulatory concerns. AT&T tried to buy T-Mobile less than two years ago, for $39 billion, and was ultimately shot down by the U.S. Justice Department. Justice’s concern: So much consolidation hurts competition, and that tends to drive up prices for consumers.

T-Mobile merged with MetroPCS earlier this year, and Japan-based Softbank now owns 80 percent of Sprint, so there’s already been a lot of consolidation this year. Taking those players and mashing them together is unlikely to look good to regulators who cast a jaundiced eye on a similar merger a couple years ago.

Second, the wireless technologies underlying the two companies are quite different. Sprint is still running on a CDMA network, like Verizon’s, while T-Mobile’s network is based on GSM and HSPA+. Phones from one type of network won’t work on the other, and vice versa. That means Sprint and T-Mobile would have a massive integration problem. The combined entity would be running two totally separate network technologies, with completely separate handset lines, for some years. It would gain no immediate advantage from combining the networks, other than combining the revenue streams and marketing budgets.

Third, regulators or not, the two companies are in the process of being wiped out by their larger rivals. It’s not clear that tying together two losers is a good recipe for making a winner in this market. Both Sprint and T-Mobile have been losing customers for years, as AT&T and Verizon have scooped them with their larger networks, faster technologies, and more aggressive marketing. A combined Sprint and T-Mobile would still be well behind both of its rivals.

Together, Sprint and T-Mobile would have about 53 million postpaid (contract) customers, according to the WSJ, compared with AT&T’s 72 million and Verizon’s 95 million.

Bottom line? This merger may be an interesting transaction from the financial markets’ point of view. But it’s unlikely to reach completion given the regulatory, technology, and market hurdles facing it. And if it does, somehow, manage to come about, it’s only going to buy Sprint and T-Mobile a little time at best.

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]]>3A Sprint-T-Mobile merger makes perfect sense, except for all the obvious problemsLet the cable TV consolidation begin! Comcast mulls Time Warner Cable acquisitionhttp://venturebeat.com/2013/11/22/let-the-cable-tv-consolidation-begin-comcast-mulls-twc-merger/
http://venturebeat.com/2013/11/22/let-the-cable-tv-consolidation-begin-comcast-mulls-twc-merger/#commentsFri, 22 Nov 2013 16:40:55 +0000http://venturebeat.com/?p=864210Time Warner Cable really isn’t doing so hot, as evidenced by its latest earnings report. Not only is the company losing a massive number of TV service subscriptions, but it’s also losing broadband Internet service customers too. Oh, and did I mention TWC kind of sucks in general? All of these developments have caused TWC […]
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Time Warner Cable really isn’t doing so hot, as evidenced by its latest earnings report. Not only is the company losing a massive number of TV service subscriptions, but it’s also losing broadband Internet service customers too. Oh, and did I mention TWC kind of sucks in general?

All of these developments have caused TWC shareholders to reconsider selling off the company to another cable provider. And one of the potential buying happens to be Comcast, according to a CNBC report that cites anonymous sources familiar with the matter.

Comcast is currently the largest cable provider in the country, followed by TWC. So if a merger were to occur, there would be massive concern over whether the combined companies would stifle the competition.

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But that doesn’t mean that federal regulators would put the screws into any such merger like they did when it came to the giant telecom merger between AT&T and T-Mobile U.S.A. a few years back (which fell apart).

Unlike the telecom industry, television providers are consistently losing subscribers as viewers migrate to the Internet for their video entertainment. There is still a portion of the country that prefers getting cable TV, but cable providers may no longer be able to grow as businesses unless they’re big enough.

Additionally, there’s little true competition between cable providers, since most areas of the country only offer one company to chose from.

So if a merger does happen, regulators would likely be fine with it provided a rather lengthy list of stipulations were met that would improve cable and Internet service for everyone; for example, forcing the new Comcast-TWC entity to provide service to all residents within a city its operating in, mandatory Internet speed increases, and maybe allowing subscribers to chose only the cable channels they want to pay for. About the only thing that wouldn’t change would be the high price of service.

Comcast isn’t the only cable provider mulling over a bid for TWC. Charter communications has also been rumored to be interested in buying TWC, despite being significantly smaller than TWC itself. And it wouldn’t at all surprise me if Google was also in the running, considering it is slowly planning to take on the competition via Google Fiber.

Would you welcome a TWC merger? Let us know in the comment section below.

The move is the latest in a long line of video companies that have decided to consolidate in order to gain more traction from a mass audience. Earlier this year Maker Studios purchased well-known video site Blip, and last year Alloy acquired DBG. And those that aren’t consolidating are raising massive amounts of funding to build a business that plays nice with YouTube, but ultimately wants to strike out as its own video network — thus cutting out YouTube’s cut of the revenue made on its content.

As for the merger, both Break and Alloy produce short video clips that are targeted at a younger audience, which make them a good match for each other. The two companies will be rebranded as Defy Media, with Break and Alloy each holding a 50 percent stake in the new venture. Alloy’s Matt Diamond will assume the role of CEO, while Break’s Keith Richman will become Defy Media’s new president.

The newly formed Defy Media will now have a combine reach of 30 million YouTube subscribers and about 50 million monthly visitors to both websites, Break and Alloy told the NYT.

More information:

]]>0Video startups Break Media & Alloy Digital to merge‘White space’ helps us understand the strategic direction of gaming mergers and acquisitionshttp://venturebeat.com/2013/08/12/white-space-helps-us-understand-the-strategic-direction-of-gaming-mergers-and-acquisitions/
http://venturebeat.com/2013/08/12/white-space-helps-us-understand-the-strategic-direction-of-gaming-mergers-and-acquisitions/#commentsMon, 12 Aug 2013 19:31:49 +0000http://venturebeat.com/?p=793166GUEST: We're supposedly in another "golden age" for gaming. But if so, where are the mergers?
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GUEST:

Nate Hennings is a vice president of Internet investment banking for Union Square Advisors.

The past few years have been a heyday for video game mergers, with $100 million-plus valuations paid for developers with one or two hits, a couple of million users, or simply a platform. Yet we have seen a recent lull as acquiror currency (meaning public stock) has waned and the key players are busy integrating their recent acquisitions. Despite this lull, it behooves us to consider where startups and established players alike might be headed in the near future. The most relevant question for those in my line of work is whether or not the recent successes (which have been primarily on mobile) will be the big merger-and-acquisitions exits in the near-term, or if they will continue to grow into public companies and be the next DeNA or GREE?

To that end, we have found it most instructive to plot major platform (online vs. mobile) against IP/audience (casual vs. hardcore) in a scatter plot (Exhibit A):

Above: Exhibit A

Image Credit: Union Square Advisors

Rather than merely slathering logos on a page, this approach enables us to plot movements in the space and get a sense for likely near-term M&A and major strategic in-house initiatives. Once the landscape is mapped out, certain white spaces emerge (Exhibit B):

These white spaces are instructive to our view as to where acquirers are heading (Exhibit C):

We explain possible causes for these white spaces, and the possible movements in the industry, as follows:

The majority of the “true” hardcore online gaming landscape has neither the capabilities nor the desire to move to mobile: Not to be confused with “mid-core,” established hardcore games (such as World of Warcraft and League of Legends) are not ready for a mobile, and they may not need to be since media (number of pixels, sound system, and so on) requirements are high, session times are long, and play is generally synchronous. To avoid confusion, we are talking about a fully immersive mobile experience with identical gameplay and controls, and synchronous play with a game’s web counterpart. Several mobile games similar to League of Legends exist today (like Zynga’s new midcore offering, Solistice Arena), but these are slimmed-down experiences.

Few publishers serve online and mobile well – Companies that do serve both online and mobile have largely done so through acquisition (EA with PopCap, or Zynga with Newtoy), perhaps with the exception of Digital Chocolate and King.com. Successful developers are usually either online or mobile, since the industry is relatively hits-driven and cross-platform development is in its infancy, with few players (such as Social Gaming Network) making cross-platform their primary focus (though this trend is changing quickly).

Hardcore mobile games face formidable challenges – Short session times, fewer available pixels, lower processing power, and limited control interfaces have stunted mobile hardcore game development. Until recently, text-based RPGs have dominated, but recent advances in processing power and screen size (most notably by tablets) are bucking this trend. The result is the rise of “social midcore” games that borrow certain mechanics (like combat) from their hardcore brethren.

Despite these challenges, we are seeing a broad shift (Exhibit C) from left to right (from online to mobile) and toward the center (toward midcore). Mobile-social midcore has emerged as the promised land – a place where Zynga, Kabam, and others are heading full speed ahead.

So what factors are driving these moves? Our guess is some combination of powerful (and sometimes addictive) game mechanics (farming and resource management, battling) coupled with flexible session times that facilitate mobile monetization. Clearly, a social aspect also drives engagement, with the more successful games using Eastern-style (anonymous) as opposed to Western-style (your Facebook friends) frameworks (many players just want to interact with avid players and not necessarily their professional colleagues or family members; this paradigm dominates in Asia). Recent successes in the real-time strategy/tower defense-style games (such as Clash of Clans or Galaxy Life) seem to nail these criteria. Their mechanics monetize extraordinarily well – fast advancement in the game is a few pennies away, yet leveling up in a short timeframe could cost tens of thousands of dollars (which whales are happy to pay). These games build loyal followings by enabling both short and long social session times (with the long sessions not just long but engaging) and coaxing the player to advance faster through microtransactions along the way.

Another catalyst for this left-to-right movement is the “mobile-first” development strategy. The most successful developers on the far right (think Rovio, Storm8, or Supercell) are mobile pure-plays; their success has spawned the recent, much-discussed “mobile first” philosophy. Underscoring the relevance for “mobile first” is Backyard Monsters’ success on Facebook — and Clash of Clans’ greater dominance on mobile. Kixeye announced a mobile version of Backyard Monsters (previously through development partner Ngmoco on the Mobage platform but now developed in-house) early last year, and the game has yet to launch. These are two strikingly similar games differentiated by a few tweaks. Were it developed “mobile first,” would Backyard Monsters be capturing the $2.4 million a day that Clans is reportedly bringing in?

Perhaps these are obvious points, and some clearly have been the foci of developers for the past two to three years. Yet it remains to be seen – is there a decade of runway for new developers to compete with iterations of these game mechanics, or are the mechanics that have made games like Clash of Clans so successful now “mature,” with little innovation to undergo in the near-term?

M&A advisers and game developers/publishers alike will want to know what this all means for the M&A market. The odds of a Supercell or a Rovio being acquired are likely lower than those companies going public, but perhaps EA or Zynga finds a way to make a big play here. Or better yet – perhaps Activision goes all-in with a big acquisition – they have yet been relatively silent on the M&A front. Even more interesting could be one of the platform players (Apple, Amazon, or Google) making a move into content. Though this may seem like an odd proposition, Netflix just made this leap, and the (stock) market loves the move. Regardless of how this plays out, there will be less “white space” in our landscape as the market matures.

Nate Hennings is a vice president of Internet investment banking for Union Square Advisors. Prior to Union Square, Hennings covered Internet, mobile, and gaming investment banking for ThinkEquity LLC. Union Square Advisors is a mergers and acquisitions and private placements advisory firm. The firm and its employees have no investments, partnerships, banking, or other commercial relationships with any of the companies discussed in this post. All expressions, views, opinions about any of the subject companies mentioned in this post are solely the employee’s personal beliefs and do not reflect the opinion of Union Square Advisors.

]]>0‘White space’ helps us understand the strategic direction of gaming mergers and acquisitionsPublicis & Omnicom merge to form a meganormous advertising firmhttp://venturebeat.com/2013/07/28/publicis-omnicom/
http://venturebeat.com/2013/07/28/publicis-omnicom/#commentsSun, 28 Jul 2013 18:11:44 +0000http://venturebeat.com/?p=785681Two of the five largest global advertising agencies -- France-based Publicis Group and New York-based Omnicom -- have announced a merger deal worth about $35.1 million, the companies announced today.
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Two of the five largest global advertising agencies — France-based Publicis Group and New York-based Omnicom — have announced a merger deal worth about $35.1 billion, the companies announced today.

The move is significant not only because it creates a new largest global ad agency, but also because of the power associated with being that large. The new Omnicom-Publicis group will have clout when discussing issues like the Do Not Track initiative, and can help feed advertising content to a growing number of digital networks, such as Google, Yahoo, Microsoft, Twitter, Facebook, and several more.

Publicis and Omnicom had combined revenues of $22.7 billion last year. The new entity will be run by dual CEOs for the time being and will trade publicly under the name Omnicom. The ad agencies also don’t expect much push back from regulators.

“We are not expecting anything that would prevent us from going forward,” Omnicom head John Wren told Reuters, adding that they needed clearance in 41-46 countries.

]]>1Publicis & Omnicom merge to form a meganormous advertising firmFCC to give SoftBank’s purchase of Sprint the OKhttp://venturebeat.com/2013/07/03/fcc-to-give-softbanks-purchase-of-sprint-the-ok/
http://venturebeat.com/2013/07/03/fcc-to-give-softbanks-purchase-of-sprint-the-ok/#commentsWed, 03 Jul 2013 14:57:46 +0000http://venturebeat.com/?p=774132Federal regulators are expected to give a nod of approval to Japanese telecom company SoftBank's bid for a controlling stake in wireless carrier Sprint.
]]>Federal regulators are expected to give a nod of approval to Japanese telecom company SoftBank’s bid for a controlling stake in wireless carrier Sprint, according to a Bloomberg report that cites unnamed sources familiar with the matter.

Last week, Sprint shareholders overwhelmingly approved the $21.6 billion merger offer from SoftBank, which gives the Japanese company a 78 percent stake in Sprint. The news is probably refreshing to Sprint shareholders as well, especially since the deal had previously stalled due to competing offers from Dish Network that ultimately fell through. The SoftBank deal also includes a 50 percent stake in Clearwire, which Sprint has relied on to lessen the load of its data-hungry subscribers.

At least three members on the Federal Communications Commission have voted on the deal, according to Bloomberg’s sources, with two of them voting favorably. A final decision from the FCC should come soon.

If the deal goes through, Sprint will still be the country’s third largest wireless carrier but will be closer to the second largest carrier, AT&T. At the very least, Sprint will now have far more resources at its disposal to grow its business.

]]>0FCC to give SoftBank’s purchase of Sprint the OKCharter mulls merger with Time Warner Cable, report sayshttp://venturebeat.com/2013/07/01/charter-mulls-merger-with-time-warner-cable-report-says/
http://venturebeat.com/2013/07/01/charter-mulls-merger-with-time-warner-cable-report-says/#commentsTue, 02 Jul 2013 02:15:13 +0000http://venturebeat.com/?p=773275Consolidation of smaller cable TV and Internet service providers across the U.S. may be on the horizon.
]]>Consolidation of smaller cable TV and Internet service providers across the U.S. may be on the horizon, according to a New York Times report published today.

Charter communications is considering a merger that would see it buy significantly larger competitor Time Warner Cable, according to anonymous sources in the NYT’s report. The deal is apparently engineered by veteran telecom deal-maker John C. Malone, whose Liberty Media Group has a 27 percent stake in Charter.

The report indicates that, if the merger is successful, Malone would urge the newly formed company to gobble up other cable providers, too. The purpose of this would be to make a serious play against Comcast, which is by far the largest broadband Internet and cable TV provider in the country. Some of the smaller providers it could swallow include Cox Communications, Cablevision, DirecTV, and Dish Network.

Charter would easily save a ton of money in content licensing, if it were to buy TWC — up to $400 million per year the report estimates.

On the high-speed Internet end of the business, consolidating providers would mean that cable companies may have the resources to boost connection speeds closer to Google Fiber’s 1Gbps connection. One downside would of course be in the price people pay for subscriptions. Most regions of the country only have one cable TV/Internet provider available, which means there isn’t anything to keep high subscription prices in check.

MetroPCS shareholders have approved the merger after T-Mobile parent Deutsche Telekom “sweetened the deal,” Reuters reports. The merger would see MetroPCS’s more than 9 million subscribers jumping over to T-Mobile’s network.

While an influx of new subscribers is great for T-Mobile, the deal will also give T-Mobile access to wireless spectrum so it can easily expand its LTE network. T-Mobile currently expects to cover 100 million people with LTE by the middle of the year and 200 million people by year’s end.

It’s also yet another feather in T-Mobile’s cap after it just smashed U.S. carrier tradition by announcing new no-contract cellular plans. T-Mobile’s new CEO John Legere hasn’t been shy about calling out its competitors for confusing and unfair contracted plans. Now T-Mobile is offering simple plans starting at $50 a month, and it’s letting subscribers pay off the cost of new phones rather than locking them in with endless subsidized pricing.

SoftBank believes that the agreed terms of our transaction with Sprint offer Sprint shareholders superior short and long term benefits to Dish’s highly conditional preliminary proposal. The SoftBank-Sprint transaction is in the advanced stages of receiving the necessary approvals, and we expect to consummate the transaction on July 1, 2013.

I suppose it would have been more surprising if Softbank said anything else. Investors were less assured in the Japanese carrier’s ability to purchase Sprint following Dish’s offer — its stock fell as much as 9.3 percent in Tokyo today, DealBook reports.

At this point, we’ll just have to wait and see what Sprint decides. With Softbank, it will have an experienced carrier as a majority stakeholder, who will also let Sprint continue to exist as an independent, publicly traded company. Dish’s deal would involve a complete merger and a big bet on the satellite TV company’s vision of offering a variety of services to compete with cable companies.

Metro Mobile, here we come. The FCC has approved the $1.5 billion merger between MetroPCS and T-Mobile USA, which would create a more powerful fourth-place wireless carrier in the United States.

T-Mobile confirmed its intent to merge with MetroPCS back in October, with a price of about $1.5 billion. The deal will help T-Mobile allocate new resources and fight off Verizon Wireless, AT&T, and Sprint. T-Mobile is the fourth place carrier, and MetroPCS is in fifth place.

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But the deal isn’t done quite yet due to regulatory approval and a vote among prospective shareholder. Now the FCC is out of the way, with chairman Julius Genachowski issuing the following statement:

With today’s approval, America’s mobile market continues to strengthen, moving toward robust competition and revitalized competitors. We are seeing billions more in network investment, while the courts have upheld key FCC decisions to accelerate broadband build-out, promote competition, and benefit consumers, including our broadband data roaming and pole attachment rules. Today’s action will benefit millions of American consumers and help the U.S maintain the global leadership in mobile it has regained in recent years.

Mobile broadband is a key engine of economic growth, with U.S. annual wireless capital investment up 40% over the last four years, the largest increase in the world, and few sectors having more potential to create jobs. In this fast-moving space, of course challenges remain, including the need to unleash even more spectrum for mobile broadband and continuing to promote competition and protect consumers. The Commission will stay focused on these vital goals.

“After a multiyear, thorough review of MetroPCS’s options, with the assistance of independent financial and legal advisers, the MetroPCS board has unanimously concluded that the proposed combination with T-Mobile is the best strategic alternative for our stockholders,” the letter reads. “The immediate cash payment you will receive and the significant ownership interest you will hold in the combined company represent a substantial premium to MetroPCS’s standalone value.”

As long as that vote goes well, look for the merger to officially close soon.

Verizon no longer wants its wireless destiny tied to the European carrier Vodafone.

Verizon is reportedly working to take full ownership over Verizon Wireless, its joint venture with Vodafone, reports Bloomberg. Among the potential options, Verizon is apparently considering a buyout of Vodafone’s 45 percent stake (worth around $115 billion, according to analyst estimates) or a massive merger.

Judging from what Bloomberg is hearing, it doesn’t sound like the merger is very likely. Two sources say the companies discussed a potential union in December, but they ended up disagreeing on headquarters location and leadership structure. A merger would also be one of the biggest corporate takeovers ever, considering Verizon’s $130 billion market cap and Vodafone’s $120 billion.

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In the end, it’s much simpler for Verizon to pay.

And with Verizon Wireless being its most profitable division, it makes sense for Verizon to want full control. It could lead to more creative subscription plans, new types of advertising, or perhaps even business ideas we haven’t even considered.

At its CES booth in January, Verizon focused heavily on the many ways it could use its wireless network outside of phones. For example, it could power video headsets for firefighters, which would help them to pull up building schematics on the fly, or it could connect solar recycling bin to alert operators when it’s full.

Vodafone’s chief executive Vittorio Colao has also been actively trying to sell off its stakes in joint operations, Bloomberg points out, so he would likely welcome Verizon’s buyout offer.

Verizon hasn’t been shy about wanting to take over its wireless division over the past few years. Verizon Wireless was born from a joint venture between Bell Atlantic (which would later become Verizon) and Vodafone in 1999. Given just how much the mobile landscape has changed since then, it simply makes sense for Verizon to want to break things off.

]]>0Verizon wants all of Verizon Wireless — considering a Vodafone merger or buyoutPractice Fusion’s first major acquisition makes health ‘feel like less of a chore’http://venturebeat.com/2013/02/27/hot-health-startup-practice-fusion-snaps-up-data-driven-app-maker/
http://venturebeat.com/2013/02/27/hot-health-startup-practice-fusion-snaps-up-data-driven-app-maker/#commentsWed, 27 Feb 2013 14:00:19 +0000http://venturebeat.com/?p=629105Practice Fusion has acquired 100Plus, a startup that provides personalized health predictions to consumers, for a combination of stock and cash.
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Practice Fusion provides free web-based health records to doctors, and now it’s expanding to serve the general public, too. The company has just acquired 100Plus, a mobile app maker that helps regular folks track the health impacts of their behavior.

The company won’t disclose the final sum, but did tell us that the acquisition was a combination of stock and cash.

100Plus’s mobile apps use analytics to show how minor behavioral changes like drinking a glass of water in the morning or walking to work can lead to a longer and healthier life. The startup’s first app demonstrated the impact of alcohol consumption on lifespan, and it launched at the SXSW conference in March.

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This is Practice Fusion’s first major acquisition, but it has ample budget given that it raised $34 million in June. The relationship appears to be longstanding — Practice Fusion’s CEO Ryan Howard is listed as 100Plus’s cofounder on Crunchbase, and he provided a small amount of funding in the company’s early days.

In a recent interview at the San Francisco headquarters, Howard revealed that Practice Fusion plans to roll out consumer health products in the coming months, so the acquisition is in line with the broader strategy.

Practice Fusion is best known for its free web-based electronic health record (EHR) for doctors, which became big business in 2009 when Congress passed the Health Information Technology for Economic and Clinical Health Act, a mandate that pushes doctors to adopt an EHR by a fixed deadline of 2015.

The 100Plus apps will likely be rebranded, and the 100Plus team will be brought into the Practice Fusion fold.

According to Practice Fusion’s associate vice president of corporate development Patrick Dugan, these insights should be made available to physicians. The goal is to keep doctors informed about a patient’s health in between visits. “100Plus was interesting for us because they make it easy for people to engage with their health on a daily basis,” he said in an interview.

Above: Chris Hogg, CEO and cofounder of 100Plus

Through the strategic acquisition, Practice Fusion will also gain an analytics expert in the form of 100Plus CEO Chris Hogg, who will assume a new role as the vice president of data science. “We were trying to make health feel like less of a chore,” Hogg told me, adding that in his new role he’ll “create a link between the doctor and patient between visits.”

Practice Fusion is accumulating a vast store of information about the patient experience, which may prove to be a valuable revenue stream. “We have more calendars, reviews about doctors, and records of visits than anyone else,” Howard told me.

The company has about 150,000 users, including doctors, nurses, and hospital admins, which accounts for about 6 percent of the addressable market.

100Plus was founded in 2011 and raised $750,000 in funding from Founders Fund, Greylock Partners, Felicis Ventures, and Band of Angels Acorn Fund, among others.

]]>0Practice Fusion’s first major acquisition makes health ‘feel like less of a chore’The 20 biggest private exits of 2012 (for the top 20 VC firms of the year)http://venturebeat.com/2013/02/19/the-20-biggest-private-exits-of-2012/
http://venturebeat.com/2013/02/19/the-20-biggest-private-exits-of-2012/#commentsWed, 20 Feb 2013 07:18:49 +0000http://venturebeat.com/?p=624989Private company research firm Privco has ranked the top 20 merger and acquisitions of the top 20 technology VC firms of 2012, including Ancestry.com's $1.6 billion sale to private equity firm Permira and other top tech acquisitions such as Yammer, Meebo, Instagram, and NextG networks.
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The biggest 2012 private exit on the list is Ancestry.com, for $1.6 billion, while Meraki, Yammer, NextG Networks, and Nicira all passed the billion-dollar mark.

Just a little more than a week, ago, PrivCo revealed the most acquisitive companies of 2012, which included Facebook, Google, Groupon, and the still-private Twitter, which was the first time a private company had made the top 10 list.

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“We had our data team pull the largest exit for each of the Top 20 tech VC firms of 2012, including company sold, date of sale, and acquisition price,” Privco CEO Sam Hamedeh told VentureBeat in an email. “Most of the deal prices below have never before been disclosed publicly, including by us.”

Here’s the data, in visual form.

Note that some exits that appear smaller are ranked higher, as they returned more capital to the venture firm that primarily backed them.